Hard Money

Hard money refers to a currency that is resistant to inflation and maintains its value over time. This type of currency is typically inelastic, meaning its supply cannot be easily expanded. Due to its finite supply, hard money is scarce.

Historically, hard money has been associated with physical commodities like gold and silver because of their limited supply. Similarly, Bitcoin has a fixed supply cap of 21 million coins. Unlike fiat currencies, which can be manipulated and are prone to inflation, hard money tends to retain its purchasing power over time because of its scarcity.

Hard money is often compared to fiat money because of its influence on economic stability and value retention. The characteristics of hard money have influenced the design of Bitcoin as Bitcoin exhibits key traits of hard money through its fixed supply cap. While hard money refers to how difficult it is to produce new units of currency, sound money refers to how well those units preserve their purchasing power over time.